Global markets regulators team up to keep watch on SPACs

Global markets regulators team up to keep watch on SPACs
Lucid Motors went public through a SPAC on July 26. (Supplied)
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Updated 27 July 2021

Global markets regulators team up to keep watch on SPACs

Global markets regulators team up to keep watch on SPACs
  • SPACS may raise regulatory concerns, said the International Organization of Securities Commissions

LONDON: Global securities markets regulators said on Tuesday they have begun monitoring special purpose acquisition companies, or SPACs, due to potential regulatory concerns.
SPACs are shell companies that list themselves on the stock market and use the proceeds to buy other companies.
It is a form of investment that soared last year on Wall Street, gathered steam in Europe this year and is now spreading into emerging markets.
“While SPACs may offer alternative sources of funding and provide opportunities for investors, they may also raise regulatory concerns,” the International Organization of Securities Commissions (IOSCO) said in a statement.
IOSCO, whose members include the US Securities & Exchange Commission (SEC), the Financial Conduct Authority in Britain and regulators in the European Union, Asia, Latin America and Africa, said its new SPAC network met for the first time on Monday to share information.
“I am pleased that so many members of IOSCO have joined the SPACs network to exchange experiences on non-traditional IPOs via SPACs and discuss emerging issues related to investor protection and fair, orderly and efficient markets,” said Jean-Paul Servais, chairman of Belgium’s markets watchdog and Vice-Chair of IOSCO’s board.
The markets watchdogs which are members of IOSCO have the power to take action to protect investors in their jurisdictions.


Surge in MENA’s SPAC activity counters IPOs drop, says Ernst & Young

Surge in MENA’s SPAC activity counters IPOs drop, says Ernst & Young
Updated 16 sec ago

Surge in MENA’s SPAC activity counters IPOs drop, says Ernst & Young

Surge in MENA’s SPAC activity counters IPOs drop, says Ernst & Young

Middle Eastern businesses are increasingly making use of the alternative route to public listing known as SPACs, a report by Ernst & Young has claimed.

The analysis shows a rise in activity involving special purpose acquisition companies (SPACs) and MENA-based firms.

SPACs are publicly listed companies created with the sole purpose of purchasing privately owned businesses, which therefore leads to its target to be listed. 

As well as private companies, sovereign wealth funds in the Middle East — including Saudi Arabia’s Public Investment Fund (PIF) and Abu Dhabi’s Mubadala — have also made use of SPACs, with PIF investing USD$75 million in NYSE-listed Compute Health in February.

Gregory Hughes, Ernst & Young MENA IPO and transaction diligence leader, said: “IPO activity during H1 2021 was below expectations, nevertheless the year did bring some remarkable deals with MENA companies showing an ever-increasing interest in SPAC transactions as a means to go public. We expect this trend to continue as companies seek to increase their international presence and gain access to a wider pool of investors.”

Among the MENA companies to go public this year after merging with SPACs were Abu Dhabi-based music streaming platform Anghami, and Dubai-headquartered transit firm Swvl Inc.

While SPAC activity was surging, the proceeds from initial public offerings (IPOs) across the region saw a year-on-year drop of 48 percent in the first half of 2021. 

Four IPOs raised USD$425.8 million, even though the number of listings stayed the same as 2020. 

Matthew Benson, EY MENA Strategy and Transactions Leader said that despite the drop, his company’s outlook on the region’s IPO activity “remains positive”.


European shares slide 1% to near two-month low on global growth worries

European shares slide 1% to near two-month low on global growth worries
Image: Shutterstock
Updated 23 min 25 sec ago

European shares slide 1% to near two-month low on global growth worries

European shares slide 1% to near two-month low on global growth worries
  • European shares sank 1 percent to a near two-month low on Monday
  • The benchmark European stocks index has now fallen for three straight weeks on worries about slowing global growth

European shares sank 1 percent to a near two-month low on Monday, tracking Asian equities lower, as investors feared major central banks would start giving cues about tapering their pandemic-era stimulus programs at various meetings this week.


The pan-European STOXX 600 index was down 1.4 percent in early trading, with energy and mining stocks leading declines on a slide in commodities prices.


The benchmark European stocks index has now fallen for three straight weeks on worries about slowing global growth and the spillover from tighter regulation of Chinese firms.


The U.S. Federal Reserve's policy meeting is in focus on Tuesday and Wednesday, where the central bank is expected to lay the groundwork for a tapering. On Thursday, the Bank of England holds its own policy meeting.


German shares slumped 1.6 percent as data showed a bigger-than-expected jump in producer prices last month.


In its biggest ever overhaul, the benchmark German index began trading on Monday with an increase in the number of constituents to 40 from 30.
 


Saudi remains China's top oil supplier as arrivals surge

Saudi remains China's top oil supplier as arrivals surge
Image: Shutterstock
Updated 31 min 15 sec ago

Saudi remains China's top oil supplier as arrivals surge

Saudi remains China's top oil supplier as arrivals surge
  • Saudi oil arrivals surged 53 percent from a year earlier to 8.06 million tonnes
  • Shipments from the United Arab Emirates fell nearly 40 percent year-on-year

Saudi Arabia, the world's biggest oil exporter, kept its ranking as China's top crude supplier for a ninth straight month in August as major producers relaxed production cuts.

Saudi oil arrivals surged 53 percent from a year earlier to 8.06 million tonnes, or 1.96 million barrels per day (bpd), data from the General Administration of Customs showed on Monday.

That compares with 1.58 million bpd in July and 1.24 million bpd in August last year.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, decided in July to ease production cuts and increase supply by a further 2 million bpd, adding 0.4 million bpd a month from August until December. In July, OPEC output increased by 640,000 bpd to 26.66 million bpd. read more

China's crude oil imports from Russia stood at 6.53 million tonnes in August, or 1.59 million bpd, flat versus 1.56 million bpd in July.

The big gap behind Saudi volumes was due to Beijing's decision to slash crude oil import quotas to its independent refiners, who favour Russia's ESPO blend.

Crude oil arrivals from Malaysia more than doubled from year-ago levels to 1.75 million tonnes, with traders saying refiners might have rebranded Venezuelan heavy oil previously passed on as bitumen blend into Malaysian crude after Beijing imposed hefty import taxes on blending fuels. read more

Meanwhile, shipments from the United Arab Emirates fell nearly 40 percent year-on-year, a possible sign demand for Iranian oil passed on as grades including UAE supplies remained lacklustre after peak arrivals early this year.

Official data has consistently recorded zero imports from Iran or Venezuela since the start of this year. 


Growth in ESG, Islamic investments support stronger asset inflows in the GCC: Moody’s

Growth in ESG, Islamic investments support stronger asset inflows in the GCC: Moody’s
Updated 53 min 6 sec ago

Growth in ESG, Islamic investments support stronger asset inflows in the GCC: Moody’s

Growth in ESG, Islamic investments support stronger asset inflows in the GCC: Moody’s
  • There will be a significant increase in demand for ESG-compliant investment products, around 38 percent of respondents said

DUBAI: The growing demand in Islamic and environmental, social, and governance (ESG)-compliant investments is expected to increase asset inflows over the next 12 months.

This is according to asset managers in Gulf countries, based on Moody’s 2021 survey of chief investment officers (CIOs) from eight leading fund firms.

“Half of CIO respondents expect double-digit growth in net inflows, and another 33% foresee a high single-digit increase,” Vanessa Robert, vice-president of senior credit officer at Moody’s Investors Service said.

“Improved investment results and stronger fees, already comparatively high in the GCC region, will further support revenue growth,” she added.

There will be a significant increase in demand for ESG-compliant investment products, around 38 percent of respondents said, while half of them expect sales of Islamic products will grow faster than sales of conventional investments in the next year.

The report also found around 50 percent of respondents said they were open to merger and acquisition activities within the next two years


France’s OVHCloud takes first step toward IPO and hopes to raise around $470m

France’s OVHCloud takes first step toward IPO and hopes to raise around $470m
Updated 20 September 2021

France’s OVHCloud takes first step toward IPO and hopes to raise around $470m

France’s OVHCloud takes first step toward IPO and hopes to raise around $470m
  • OVHCloud hopes the IPO will “accelerate its growth trajectory and consolidate its European leadership position while continuing to expand in North America and Asia”

PARIS: French cloud computing services provider OVHcloud said it was hoping to raise 400 million euros ($468.64 million) via the issuance of new shares as part of a planned initial public offering (IPO) on the Paris stock market.
OVHCloud hopes the IPO will “accelerate its growth trajectory and consolidate its European leadership position while continuing to expand in North America and Asia,” the company said, as it released its IPO registration document.
The family-owned company added on Monday that it was targeting a revenue growth of 10-15 percent for 2022 and an organic revenue growth rate in the mid-twenties by 2025.
These growth targets would be achieved while maintaining an adjusted EBITDA (earnings before interest, tax, depreciation and amortization) margin in line with the fiscal 2020 level.
No dividend payments were anticipated in the mid-term with cash-flows expected to be re-invested in line with the company’s accelerating growth trajectory, it added.
Following the IPO, the Klaba family will retain a substantial majority stake in OVHcloud.
The company had initially announced its IPO plans in March, two days before a major blaze destroyed one of its data centers in eastern France — a disaster that had raised concerns about its capacity to go public.
In June, OVHCloud re-committed to an IPO but provided no timetable.